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305 short wa - recovery even with the number of jobs...

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Classical Model: Unemployment The attached article is a brief analysis of recent unemployment data and what it could mean for Americas unemployment rate in the near future. From August to September of this year roughly 103,000 jobs were created and there were similar indicators of an employment comeback. Unemployment insurance claims were lower than expected and the increase in payrolls was higher than expected. The article concludes with a segment on 10-year Treasury yields and their connection to the unemployment rate. The US economy is showing positive signs of a economic comeback but at the current pace it could take quite some time before we see the unemployment rate drop to pre-recession levels. The unemployment rate is determined by dividing the number of unemployed by the labor force. Unemployment rate = Number unemployed X 100 Number in Workforce In the article, it makes note of economists being skeptical about an economic
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Unformatted text preview: recovery even with the number of jobs increasing. They make this argument because even though there are more jobs being added, it is happening so slowly that it is nearly equal to the population growth rate. Job growth at this rate may sound like good news but it is far to slow to bring down the unemployment rate as soon as we would like. For a real reduction in the unemployment rate the equation above needs to be altered much faster than what we are seeing. The basic model of determining unemployment is sufficient to describe what is happening within the article. The numbers on in the equation are both changing but the end result is very similar to the unemployment rate we had several months ago. Jobs are being added to the economy but those who have been unemployed for a substantial amount of time still face frictional unemployment and risk degrading their human capital the longer they stay unemployed....
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